Solana Foundation has unveiled its latest proprietary automated market maker (PropAMM) mechanism aimed at improving trading efficiency between decentralized exchanges (DEX) and centralized exchanges (CEX). According to Foresight News, unlike traditional centralized market makers, PropAMM employs a hybrid approach that uses offline predictive price models to push minimal price data on-chain and utilizes smart contract logic for real-time quote calculations. This method combines the efficiency of CEX with the settlement advantages of DEX.
PropAMM is capable of dynamic quoting, providing deep liquidity for regular users while preventing outdated price arbitrage. The information provided indicates that PropAMM offers 99% of the efficiency of CEX at a significantly lower cost than traditional models.
